Blackout risk expected to rise next summer

By Emily Pickrell

Updated 10:23 pm, Monday, December 10, 2012

Photo: Allison V. Smith, The New York Times

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Electric power reserves are expected to be below targeted levels next summer, which means there is a risk of rolling blackouts at peak power usage times, according to a report by the Electric Reliability Council of Texas.

Electric power reserves are expected to be below targeted levels next summer, which means there is a risk of rolling blackouts at peak power usage times, according to a report by the Electric Reliability

The Texas electric grid will have less cushion than expected next summer, increasing the risk of blackouts during the hottest days, grid operators cautioned in a long-term study released Monday.

The Electric Reliability Council of Texas now projects that the margin of capacity over projected peak demand will fall slightly below the 13.75 percent it prefers as it tries to prevent rolling blackouts. ERCOT operates most of the state grid.

The latest report anticipates that electricity generators will be able to produce 74,633 megawatts of power next summer, while the expected electric use peak will be 65,952 megawatts. That's a 13.2 percent margin.

In emergency situations where there isn't enough generation to meet demand for electricity, ERCOT orders utilities, including San Antonio's CPS Energy, to curtail generation, which results in rolling blackouts.

The grid operator had nine emergency alerts in 2011, including one during unseasonably cold weather on Feb. 2 that did result in rolling blackouts. There have been no such alerts so far in 2012, and the council attributes that to public conservation and improved resource planning by generators.

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“Although peak demand is expected to grow less quickly than previous economic predictions indicated, we should continue to encourage new generation and develop more demand response options to reduce our electric use during periods of highest use — the hottest hours of the hottest days of summer,” ERCOT CEO H.B. “Trip” Doggett said in a written statement.

The projected 2013 reserve has fallen since last May, when the council said it would be 14.3 percent.

The difference resulted from changes in Moody's economic forecasts for Texas, which affect projected demand, and from companies' plans to take plants on or offline, Warren Lasher, the council's director of planning, said in a conference call to discuss the report.

ERCOT said the 2014 margin now is projected to be 10.9 percent — higher than forecast in May but well below the projected margin for this year. Lasher said, however, that the margin in 2014 could climb as high as 13.6 percent, depending on when three plants currently under construction are completed.

“As generation units that are under study get added to the list, the outlook will change over time,” Lasher said.

In October, Texas' Public Utility Commission voted to double the cap on wholesale power prices at peak times, hoping to encourage construction of new generating capacity.

In a separate report Monday, the Texas Coalition for Affordable Power said that electricity prices were lower and reserve margins were higher before the system was deregulated in 2002. San Antonio's market is not part of the deregulated market; its power is provided by city-owned CPS.

Texas residents have paid $10.4 billion more than they would have under continued regulation, said the coalition, a critic of the deregulated system that created a competitive wholesale and retail power market.

Texas electricity prices, meanwhile, now exceed the national average, which was not the case before deregulation, according to the study.

“We have gone through many years of very high prices in Texas under this system,” said Jake Dyer, a spokesman for the Texas Coalition for Affordable Power. “While they have now come down 10 years later, we are still facing reliability issues and our projected margins have gone down.”